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UK preliminary PMI survey strongest in year
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GfK consumer confidence index highest since Feb 2022
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Retail sales fall but rain seen as factor
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UK economy seen as laggard among peers
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Bank of England due to make next rate decision in May
(Combines separate stories)
By Suban Abdulla and William Schomberg
LONDON, April 21 (Reuters) - British businesses reported
their busiest month in a year and consumers turned more
confident, according to surveys published on Friday that added
to signs of a recovery in the economy that has so far defied
forecasts of a recession.
The preliminary reading of the S&P Global/CIPS UK Composite
Purchasing Mangers' Index (PMI) also showed the slowest input
cost inflation in over two years, but price pressures look
strong enough for the Bank of England to raise rates again next
month.
The PMI - spanning services and manufacturing firms - rose
to 53.9 in April from 52.2 in March, putting it further above
the 50 line denoting growth for the third consecutive month and
representing the strongest growth since April last year.
Economists polled by Reuters had forecast a lower reading of
52.5.
"The key takeaway is that the economy as a whole is not only
showing encouraging resilience but has gained growth momentum
heading into the second quarter," Chris Williamson, chief
business economist at S&P Global, said.
The PMI was driven by the services sector as consumer
spending on travel, leisure and entertainment showed strength
while manufacturing remained weak.
Williamson said the survey was consistent with quarterly
gross domestic product growth of 0.4%.
Last month the BoE said it expected modest economic growth
in the second quarter of 2023, though it still predicted a
contraction in the first quarter.
It is widely expected to increase borrowing costs for the
12th meeting in a row in May as it continues to grapple with an
inflation rate above 10%.
The International Monetary Fund this month predicted that
Britain's economy would shrink by 0.3% in 2023, a less severe
hit than its previous forecast but still the sharpest
contraction among the world's big rich economies this year.
S&P Global's input price index - a good guide to future
inflation pressures - showed the slowest growth in costs for
firms since March 2021, although overall cost pressures remained
high by historical standards.
There were also signs of recovery in Friday's consumer
confidence survey by polling firm GfK which rose to its highest
since February last year, albeit to weak levels.
Consumers' expectations for Britain's economy in the next 12
months hit a 15-month high and they rated the prospects for
their finances as the best since February 2022.
"The brighter views on what the general economy has in store
for us ... could even be seen as the proverbial 'green shoots of
recovery'," Joe Staton, GfK's client strategy director, said.
There was a reminder of the problems facing many consumers
in official retail sales data also published on Friday.
Sales volumes fell by a greater-than-expected 0.9% in March
from February, but some of the weakness was attributed to rainy
weather as well as the impact of high inflation.
Darren Morgan, director of economics at the Office for
National Statistics, said the broader trend for retail sales was
less subdued than the figures for March alone suggested.
"A strong performance from retailers in January and February
means the three-month picture shows positive growth for the
first time since August 2021," he said.
(Reporting by Suban Abdulla; Editing by Hugh Lawson)
